View Full Version : Executive Condominium Housing Scheme to be refined
princess_morbucks
09-12-13, 18:52
http://app.mnd.gov.sg/Newsroom/NewsPage.aspx?ID=5023&category=Press%20Release&year=2013&RA1=&RA2=&RA3=
Refining the Executive Condominium Housing Scheme 09 Dec 2013 07:30 PM http://app.mnd.gov.sg/Images4File/spacer.gif
The Government will implement three measures for Executive Condominium (EC) developments to bring the terms for ECs closer to that for public housing, and help support a stable and sustainable EC market. This follows a review by MND on the EC Housing Scheme, taking into account feedback from the Our Singapore Conversation on Housing.
I. Reduce EC Cancellation Fees
2 First, we will reduce the cancellation fees for ECs from 20% to 5% of the purchase price. This will relieve the financial burden of buyers who have to cancel their EC bookings after signing the Sale & Purchase Agreement. The new cancellation fee will be applied to EC land sales which are launched on or after 9 Dec 2013, including those where the tenders have not closed.
3 The cancellation fee for ECs is currently set at 20% of the purchase price, similar to those for private housing. However, unlike buyers of private housing, buyers of EC units cannot sub-sell their units if they cannot complete their purchase, and have to pay the cancellation fee. This has especially imposed significant financial burden on young couples who subsequently are not able to proceed with their marriage and hence the EC purchase.
4 We will therefore align the cancellation fees for EC units with that for HDB Build-to-Order (BTO) flats, and reduce them from 20% to 5% of the purchase price.
II. Resale Levy for Second-Timer Applicants
5 Second, we will now require second-timer applicants who buy EC units directly from property developers to pay a resale levy, similar to second-timer applicants who buy BTO flats. The new requirement will be applied to EC land sales which are launched on or after 9 Dec 2013, including those where the tenders have not closed.
6 Currently, second-timer applicants who buy EC units directly from property developers benefit from the lower EC prices arising from the initial eligibility and ownership restrictions imposed on EC purchases. However, they do not need to pay a resale levy. The alignment of treatment with second-timer applicants who buy BTO flats will ensure greater parity.
III. Revision of Mortgage Loan Terms
7 Third, the Monetary Authority of Singapore (MAS) will cap the Mortgage Servicing Ratio (MSR) for housing loans granted by financial institutions for EC units bought directly from property developers at 30% of a borrower’s gross monthly income. This is in line with earlier measures introduced by the HDB and MAS to encourage financial prudence among buyers of public housing. It discourages EC buyers from over-stretching their finances and supports an affordable and sustainable EC market.
8 The 30% MSR cap will apply to EC purchases where the Option to Purchase is granted on or after 10 Dec 2013.1
Enquiries
9 For further enquiries on any of the above measures, the public can contact the HDB Sales Customer Service Line: 1800-866-3066.
Issued by: Ministry of National Development
Date 9 Dec 2013
Going forward EC demand will drop!
I can see a cycle repeating the tide has turned.
Indeed. The screws are turned one by one.
III. Revision of Mortgage Loan Terms
7 Third, the Monetary Authority of Singapore (MAS) will cap the Mortgage Servicing Ratio (MSR) for housing loans granted by financial institutions for EC units bought directly from property developers at 30% of a borrower’s gross monthly income. This is in line with earlier measures introduced by the HDB and MAS to encourage financial prudence among buyers of public housing. It discourages EC buyers from over-stretching their finances and supports an affordable and sustainable EC market.
8 The 30% MSR cap will apply to EC purchases where the Option to Purchase is granted on or after 10 Dec 2013.1
Does this mean if I earn 10k gross, my loan instalment per month is 3k max?
princess_morbucks
09-12-13, 20:27
Does this mean if I earn 10k gross, my loan instalment per month is 3k max?
The TDSR of 60% , and now MSR of 30% will apply to the loan repayment of EC.
That means if my monthly salary is $10k, I can only pay up to $3k per month, provided that I do not have other exisiting loan, eg car loan, study loan, etc.
Loan period capped at 30years maximum.
What is the MSR for private condo then?
princess_morbucks
09-12-13, 20:47
What is the MSR for private condo then?
IIRC, there is no MSR for pte ppty.
IIRC, there is no MSR for pte ppty.
I will write to khaw on this then. Thanks.
government is basically tell greedy investors that every singaporeans will be given only one shot at subsidized government housing, be it BTO or EC, and they are encouraging first timer to take advantage of government grants.
So for those who already gain once, they should stop going back for more.
I personally do not see this measures will have great impact on the demand side because EC ultimately is still the best bang for bucks private housing for own stay.
Perhaps land bid for EC might some what cool a little. But that again doesnt mean it will translate to lower selling price
Resale levy for 2nd timer applicant of ECs will lend support to HDB prices in its current downward COV trend.......
It is also to encourage 2nd timer to look at BTOs instead.
Now times are still good...... buy already won't cancel....
Government is really trying to protect people, if market turns.... everyone will cancel and developer suck thumb......
800psf EC plus 20% resale levy = assume 880psf.
Support OCR PC price at 1100-1200psf?
II. Resale Levy for Second-Timer Applicants
5 Second, we will now require second-timer applicants who buy EC units directly from property developers to pay a resale levy, similar to second-timer applicants who buy BTO flats. The new requirement will be applied to EC land sales which are launched on or after 9 Dec 2013, including those where the tenders have not closed.
6 Currently, second-timer applicants who buy EC units directly from property developers benefit from the lower EC prices arising from the initial eligibility and ownership restrictions imposed on EC purchases. However, they do not need to pay a resale levy. The alignment of treatment with second-timer applicants who buy BTO flats will ensure greater parity.
does this mean for those who bought 2nd EC from developer? Is 1st time BTO, 2nd time EC counted?
The TDSR of 60% , and now MSR of 30% will apply to the loan repayment of EC.
That means if my monthly salary is $10k, I can only pay up to $3k per month, provided that I do not have other exisiting loan, eg car loan, study loan, etc.
Loan period capped at 30years maximum.
30% MSR means if my monthly salary is $10k, I can only pay up to $3k per month.
60% TDSR means if my monthly salary is $10k, new housing loan and all other loans cannot exceed 6k.
irony is a person without loan can pass TDSR but fail MSR for purchase of HDB and EC.
30% MSR means if my monthly salary is $10k, I can only pay up to $3k per month.
.
assuming 2% interest rate, and for 25 years loan, a person can loan upto 700k for a $2966 monthly instalment.
assuming 2% interest rate, and for 25 years loan, a person can loan upto 700k for a $2966 monthly instalment.
assessment is based on 3.5% and max 30 years for 80% LTV.
Pikachu1245
09-12-13, 22:30
Resale levy for 2nd timer applicant of ECs will lend support to HDB prices in its current downward COV trend.......
It is also to encourage 2nd timer to look at BTOs instead.
Now times are still good...... buy already won't cancel....
Government is really trying to protect people, if market turns.... everyone will cancel and developer suck thumb......
Seems like no more chance today onwards for those thinking of hoot and buy big big ec and look forward to gain big big after 5 years from TOP.
Too lenient. EC should be scrapped. Either HDB or pte. Make it simple.
II. Resale Levy for Second-Timer Applicants
5 Second, we will now require second-timer applicants who buy EC units directly from property developers to pay a resale levy, similar to second-timer applicants who buy BTO flats. The new requirement will be applied to EC land sales which are launched on or after 9 Dec 2013, including those where the tenders have not closed.
6 Currently, second-timer applicants who buy EC units directly from property developers benefit from the lower EC prices arising from the initial eligibility and ownership restrictions imposed on EC purchases. However, they do not need to pay a resale levy. The alignment of treatment with second-timer applicants who buy BTO flats will ensure greater parity.
does this mean for those who bought 2nd EC from developer? Is 1st time BTO, 2nd time EC counted?
1st BTO and 2nd EC no resale levy.
Govt is plugging the hole on those who have bought EC the first time, selling it at huge profit
and buy cheaper EC the 2nd time.
Actually resale levy impact is negligible because it affect on those previous EC owners.
The most impact on the current new EC market will be the MSR.
Everyone buying EC will have impact including those who don't have to pay resale levy.
proud owner
09-12-13, 22:57
Seems like no more chance today onwards for those thinking of hoot and buy big big ec and look forward to gain big big after 5 years from TOP.
cant help but feel that those who acted fast benefitted again ...
sometimes we cannot fault singaporeans for being Kiasu ... once again those who got in early and FAST ... emerged the winner once more ...
sigh
puffer_fish
09-12-13, 22:59
The more barriers and requirements the government install, the safer it would be for investors.
good news. Excellent move by khaw, brilliant in planning and execution
too bad lky Is my mp , cant vote for khaw
The more barriers and requirements the government install, the safer it would be for investors.
good news. Excellent move by khaw, brilliant in planning and execution
too bad lky Is my mp , cant vote for khaw
Why more measures = safer FOR INVESTOR?
Wouldn't market Correct? How can that be safer for Investor?
puffer_fish
09-12-13, 23:47
in current situation, only players with strong finances are able to invest.
so even corrections means nothing cos with investors that could afford 50% down payments excluding 15% taxes , etc .....
what i am more afraid is investors with weak finances, investing.
just like swimming, if the whole cohort are strong swimmers, everyone would be able to handle the tides.
really hats off to khaw for coming up with such high barriers of entry
anyway corrections means you could buy the same place at cheaper rates for investors whom just want to accumulate wealth.
prices must offset absd before labelled as cheaper
II. Resale Levy for Second-Timer Applicants
5 Second, we will now require second-timer applicants who buy EC units directly from property developers to pay a resale levy, similar to second-timer applicants who buy BTO flats. The new requirement will be applied to EC land sales which are launched on or after 9 Dec 2013, including those where the tenders have not closed.
6 Currently, second-timer applicants who buy EC units directly from property developers benefit from the lower EC prices arising from the initial eligibility and ownership restrictions imposed on EC purchases. However, they do not need to pay a resale levy. The alignment of treatment with second-timer applicants who buy BTO flats will ensure greater parity.
does this mean for those who bought 2nd EC from developer? Is 1st time BTO, 2nd time EC counted?
1st BTO and 2nd EC no resale levy.
Govt is plugging the hole on those who have bought EC the first time, selling it at huge profit
and buy cheaper EC the 2nd time.
Actually resale levy impact is negligible because it affect on those previous EC owners.
The most impact on the current new EC market will be the MSR.
Everyone buying EC will have impact including those who don't have to pay resale levy.
http://www.channelnewsasia.com/news/business/mnd-refines-ec-housing/916838.html
Second-timer applicants who buy EC units directly from property developers will have to pay a resale levy, similar to second-timer applicants who buy BTO flats.
The levy will range from S$15,000 to S$50,000 depending on the flat type of their first HDB property.
resale levy impact all existing subsidised hdb owners who want to upgrade to an EC. Actually, this is just reverting back to the old rule. In the past, hdb owners have to pay resale levy for upgrading to EC.
So if they don't want to pay levy, then must go direct to PC, not EC.
1st BTO and 2nd EC no resale levy.
Govt is plugging the hole on those who have bought EC the first time, selling it at huge profit and buy cheaper EC the 2nd time. Actually resale levy impact is negligible because it affect on those previous EC owners. The most impact on the current new EC market will be the MSR. Everyone buying EC will have impact including those who don't have to pay resale levy.
Don't understand, bought EC the first time, selling it at huge profit and buy cheaper EC the 2nd time. If you buy at the right time EC or PC is still the same, 2006 got no EC so no huge profit:beats-me-man: anyone buy PC in 2006 Huat Big Big why wait and buy EC:beats-me-man:
If you have SGD 100,000 and buy a PC in 2006 now you should have at least a 2 Bedroom PC and a 3 Bedroom PH PC UC in 2011.
The reason for all these CMs is because more people begin to understand "What is Money."
http://www.youtube.com/watch?v=4It8bMdqs0M
1st BTO and 2nd EC no resale levy.
Govt is plugging the hole on those who have bought EC the first time, selling it at huge profit
and buy cheaper EC the 2nd time.
Actually resale levy impact is negligible because it affect on those previous EC owners.
The most impact on the current new EC market will be the MSR.
Everyone buying EC will have impact including those who don't have to pay resale levy.
Don't understand, bought EC the first time, selling it at huge profit and buy cheaper EC the 2nd time. If you buy at the right time EC or PC is still the same, 2006 got no EC so no huge profit:beats-me-man: anyone buy PC in 2006 Huat Big Big why wait and buy EC:beats-me-man:
If you have SGD 100,000 and buy a PC in 2006 now you should have at least a 2 Bedroom PC and a 3 Bedroom PH PC UC in 2011.
in the first place, for existing EC owners to sell EC, then buy another EC from developers... they have to wait for 30 months (same rule as ex-PC owners)
http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyingNewFlatEC?OpenDocument#Owners
Ex-owners of an EC:
Are you, your spouse or any of the essential occupiers listed in the application an ex-owner of an Executive Condominium bought directly from the developer? If yes, you would need to meet a 5-year period from the date of taking possession of the earlier Executive Condominium.
30-Month Period:
In addition, you need to wait out a 30-month period from the effective date of disposal (i.e., date of legal completion of the sale of their Executive Condominium, evidenced by the Notice of Transfer or such other documentary evidence as HDB may require) of the Executive Condominium before you can apply to buy another Executive Condominium directly from the developer.
The reason for all these CMs is because more people begin to understand "What is Money."
so effect of this EC cm are these ?
- hdb upgraders must well go for PC directly (to avoid resale levy)
- hdb upgraders must well go for bigger/better located resale HDB (to avoid resale levy)
- less HDB upgraders to support developer EC pricing
- in a way, PC/resale PC/resale hdb get a bit more potential buyers :D ...er.. maybe new OCR PC gain more buyers, since buyers who go for new EC, means can wait for construction of 3 years to get a NEW unit.
assuming 2% interest rate, and for 25 years loan, a person can loan upto 700k for a $2966 monthly instalment.
Can someone explain how to buy any EC if the loan is more than 1.2 million with this MSR if u are earning only $10k?
Can someone explain how to buy any EC if the loan is more than 1.2 million with this MSR if u are earning only $10k?
2 things will most likely happen....
1. For big units, there is this thing called - "dad and/or mum's money"... For more down payment....
2. Developers will need to build more affordable flats...
:D:D
Can someone explain how to buy any EC if the loan is more than 1.2 million with this MSR if u are earning only $10k?
EC salary cap is $12k
$12k * 30% MSR = $3.6k
house price = $1m
loan 80% = $800k
tenture = 30 yrs
interest = 3.5%
installment = $3,592.36
so actually can only buy up to $1m EC if loan 80%.
to buy 1.2m EC, pay more in cash lor :D
If the resale levy ranges from $15K to $50k, it's not that big a deterrent for someone who has made a pile from the direct purchase BTO or EC.
So wouldn't expect that much impact on demand.
It is more to make the situation equitable - level the field a bit for those who have yet to gain from the system.
If the resale levy ranges from $15K to $50k, it's not that big a deterrent for someone who has made a pile from the direct purchase BTO or EC.
So wouldn't expect that much impact on demand.
It is more to make the situation equitable - level the field a bit for those who have yet to gain from the system.
With the resale price of BTO dropping, difficult to make a pile from BTO nowadays (or even in the near future)
Developers bought GLS for EC will have to rethink their strategy by building less than 1mil apartment, ie unit will be even smaller moving forwards. :o
Developers bought GLS for EC will have to rethink their strategy by building less than 1mil apartment, ie unit will be even smaller moving forwards. :o
true, but still got to make it worthwhile for HDB owners to pay more to downsize.
true, but still got to make it worthwhile for HDB owners to pay more to downsize.
It's an aspiration.... Look at c180... Hahaha
Look at all the condos today....
Look at how hdb shrunk????
Look at HK, London, New York...
We are heading there
cant help but feel that those who acted fast benefitted again ...
sometimes we cannot fault singaporeans for being Kiasu ... once again those who got in early and FAST ... emerged the winner once more ...
sigh
I strongly agree with u, the numerous measures are 'fast and furious' , now tose who wait can virtually bang all walls! Just put your $ in the bank and keep at ultra low interest!
It's an aspiration.... Look at c180... Hahaha
Look at all the condos today....
Look at how hdb shrunk????
Look at HK, London, New York...
We are heading there
Look at LITTLE india...lets not head there:D
Look at LITTLE india...lets not head there:D
Brudder, when you get a gathering of people and something happens... all emotion runs amok.... Look at soccer stadium in UK...
bro... when we got developed country status, you need to look at the developed nations and see what happened... Then you will know where we will be...
But on a serious note... it is those non developed that has the most potential and highest risk...:D:D:D
Unlikely developer will lower the bidding price for the land. What they can do is
1. Reducing the unit size to make it more affordable
2. Reduce the cost , lesser or not too attractive facilities, minimal or no furnishing at the unit...
So what I can see is that the EC might get less attractive to own, and may have slower pace of appreciation in view of the facilities, cost and size. I expect OCR Pc will pick up soon..
Unlikely developer will lower the bidding price for the land. What they can do is
1. Reducing the unit size to make it more affordable
2. Reduce the cost , lesser or not too attractive facilities, minimal or no furnishing at the unit...
So what I can see is that the EC might get less attractive to own, and may have slower pace of appreciation in view of the facilities, cost and size. I expect OCR Pc will pick up soon..
Cost cutting is easy: no kitchen cabinets, toilet mirrors, ward-robes or air-cons. Other fixtures are made from cheap materials. Just like in Malaysia.
http://www.channelnewsasia.com/news/business/mnd-refines-ec-housing/916838.html
Second-timer applicants who buy EC units directly from property developers will have to pay a resale levy, similar to second-timer applicants who buy BTO flats.
The levy will range from S$15,000 to S$50,000 depending on the flat type of their first HDB property.
resale levy impact all existing subsidised hdb owners who want to upgrade to an EC. Actually, this is just reverting back to the old rule. In the past, hdb owners have to pay resale levy for upgrading to EC.
So if they don't want to pay levy, then must go direct to PC, not EC.
when Msia flip flop on the rules, ppl CPCB.
when SG flip flop, ppl LL just pay.:D
Brudder, when you get a gathering of people and something happens... all emotion runs amok.... Look at soccer stadium in UK...
bro... when we got developed country status, you need to look at the developed nations and see what happened... Then you will know where we will be...
But on a serious note... it is those non developed that has the most potential and highest risk...:D:D:D
very true bottomline its a wake up call for EVERYBODY in this country...;)
assessment is based on 3.5% and max 30 years for 80% LTV.
So for a combined income of S$10K, max loan amount is S$668K, instalments @S$2,999.62.....if it's 80% of the property price, property price is $835K!!
Don't understand, bought EC the first time, selling it at huge profit and buy cheaper EC the 2nd time. If you buy at the right time EC or PC is still the same, 2006 got no EC so no huge profit:beats-me-man: anyone buy PC in 2006 Huat Big Big why wait and buy EC:beats-me-man:
If you have SGD 100,000 and buy a PC in 2006 now you should have at least a 2 Bedroom PC and a 3 Bedroom PH PC UC in 2011.
The reason for all these CMs is because more people begin to understand "What is Money."
http://www.youtube.com/watch?v=4It8bMdqs0M
This also means that govt wants people (esp young families) to stay put in their HDB. Logically speaking, why pay $50k~100k resale levy when it can be used to pay next PTE or resale HDB purchase in choice location.
The bigger EC units looks to be aiming at those with multi-gen needs. The smaller ECs cater to those first timer couples who are sandwiched but can afford EC after the grants with low dnpayment. The mthly mortgage usually not a problem for these twenties & early thirties as still have 30-35 years tenure.
Implementation seems to curb unnecessary upgrading demands but still able to cater to up stream housing needs.
EC salary cap is $12k
$12k * 30% MSR = $3.6k
house price = $1m
loan 80% = $800k
tenture = 30 yrs
interest = 3.5%
installment = $3,592.36
so actually can only buy up to $1m EC if loan 80%.
to buy 1.2m EC, pay more in cash lor :D
Interest may be at 1.5% now so $1M loan still possible.
Interest may be at 1.5% now so $1M loan still possible.
I think the interest rate is 3.5% in the calculation of msr.. regardless of current interest rates. Therefore a loan of $1M with 12kpm income is no longer possible.
so no more crash?:scared-5:
Heard the news yesterday night and ironically, received my S&P from the courier yesterday night as well. I just booked a 3 bedroom EC last month. I am a upgrader and currently still holding on to my flat. If for whatever reasons, I don exercise the S&P, I will be subject to the 30% MSR and likely will not be able to obtain the desired loan. I will also have to pay a resale levy of about 45k if I want to buy an EC again in future. But at the same time, with the new CM, EC prices may drop due to demand moderating. Any advice?
scorpio_sg
10-12-13, 14:07
Heard the news yesterday night and ironically, received my S&P from the courier yesterday night as well. I just booked a 3 bedroom EC last month. I am a upgrader and currently still holding on to my flat. If for whatever reasons, I don exercise the S&P, I will be subject to the 30% MSR and likely will not be able to obtain the desired loan. I will also have to pay a resale levy of about 45k if I want to buy an EC again in future. But at the same time, with the new CM, EC prices may drop due to demand moderating. Any advice?
Get it. Sign the S and P.
Get it. Sign the S and P.
Agreed....
Get it. Sign the S and P.
Agree .......
Thanks guys for the replies. Any reasons, in your opinion.
then you don't sign, pass to me, i sign and I pay you your deposit:D
Thanks guys for the replies. Any reasons, in your opinion.
the reasons are straight forward. all these new measures may impact you and prevent you from buying another ec; plus your reentry price whether into ec or pc is higher, even if price drops. this is literally speaking your last bite.
the only reasons to consider backing out are:
1. you chose a very expensive unit. still ok if you can service the loan.
2. you think the market will crash and pc becomes cheaper than your current ec price. even then your reentry price is still higher whether pc or ec.
3. you overleverage and will get hit by the repricing at top. this should be unlikely in your case.
4. bad location. then why buy in the first place.
go back to your original reason for wanting to buy and work it out from there.
hope this helps. cheers.
You won't go wrong with EC ... in fact you should get the biggest possible
Thanks guys for the replies. Any reasons, in your opinion.
Bro, here's my take.
1. MSR will remain if you buy now or later (as for now)
2. your current pay already got you a loan
3. what will be the next CM on current flat or EC in future no one know
4. future EC might be even smaller as developer want to bring down on price
5. why want to pay levy in future where you still got chance for the free ride
6. what will be the HDB resale market in future
7. EC still in demand currently and the price are on the upward trend.
8. Future price might be stable rather then downward
9. maximize your loan tenure
10. developer in order to pull down future ec price might use a lower grade materials or reduce no of facilities etc
11. ensure you have a better job or maintain your current one to get a loan
:2cents::2cents::2cents::2cents:
Heard the news yesterday night and ironically, received my S&P from the courier yesterday night as well. I just booked a 3 bedroom EC last month. I am a upgrader and currently still holding on to my flat. If for whatever reasons, I don exercise the S&P, I will be subject to the 30% MSR and likely will not be able to obtain the desired loan. I will also have to pay a resale levy of about 45k if I want to buy an EC again in future. But at the same time, with the new CM, EC prices may drop due to demand moderating. Any advice?
That's why we tell our clients to apply for in principle Approval first
Pikachu1245
10-12-13, 18:02
Seems like no more chance today onwards for those thinking of hoot and buy big big ec and look forward to gain big big after 5 years from TOP.
On hindside after reading several post by members here, realise EC at 1.2 mio to 1.5 mio is still possible if any amt more than one mio is paid by parents or grandparents as at 3.5% for for couple salary of 12K, MSR 30%, 30 years loan amt is about $800000 for one mio EC,assuming 80% loan. Multi gen can still
hoot and buy 4 to 5 bedder with parent/grandparent paying the rest 200K to 500K with cash or cpf. High risk, high gain. No risk, no gain?
Perhaps this policy rewards filial piety, ie eat play work with parents / grandparents under one roof and be rewarded in 5 to 10 years when housing boom again......
Heard the news yesterday night and ironically, received my S&P from the courier yesterday night as well. I just booked a 3 bedroom EC last month. I am a upgrader and currently still holding on to my flat. If for whatever reasons, I don exercise the S&P, I will be subject to the 30% MSR and likely will not be able to obtain the desired loan. I will also have to pay a resale levy of about 45k if I want to buy an EC again in future. But at the same time, with the new CM, EC prices may drop due to demand moderating. Any advice?
In June 2006, a young couple walk into a showflat at Lavendar looking for two bedroom PC. It was selling for SGD 535,000 for 958 sqft and they went back to think about it. The following week only the penthouse is not sold.
Then there was this middle age man, brought the unit on the day and the rest are history.
Moral of the story is if you can pay for the next 5 yrs, if this is a EC, BTO go ahead don't think same goes with the PC.
On hindside after reading several post by members here, realise EC at 1.2 mio to 1.5 mio is still possible if any amt more than one mio is paid by parents or grandparents as at 3.5% for for couple salary of 12K, MSR 30%, 30 years loan amt is about $800000 for one mio EC,assuming 80% loan. Multi gen can still
hoot and buy 4 to 5 bedder with parent/grandparent paying the rest 200K to 500K with cash or cpf. High risk, high gain. No risk, no gain?
Perhaps this policy rewards filial piety, ie eat play work with parents / grandparents under one roof and be rewarded in 5 to 10 years when housing boom again......
So perhaps 800k is the magic loan quantum, 1mio is the price our gov wants.
In June 2006, a young couple walk into a showflat at Lavendar looking for two bedroom PC. It was selling for SGD 535,000 for 958 sqft and they went back to think about it. The following week only the penthouse is not sold.
Then there was this middle age man, brought the unit on the day and the rest are history.
Moral of the story is if you can pay for the next 5 yrs, if this is a EC, BTO go ahead don't think same goes with the PC.
Now got deposit, bank may not lend u.
This measure means EC price should come down, but when?
Till all the already tender out EC r soldout, by then the market will be over supply with new completed PC.
princess_morbucks
11-12-13, 08:51
So now the dreams of upgrading from BTO to EC gets further away.
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http://news.asiaone.com/news/business/ec-upgraders-may-take-big-loan-hit
Recent tweaks to the executive-condominium (EC) housing scheme will likely squeeze out home buyers who fall close to or below the monthly household income cap to buy public flats directly from the Housing Board.
This refers to those who have a household income below $10,000 and aspire to buy an EC instead of a flat from HDB.
One of the new tweaks caps the proportion of a borrower's gross monthly salary that can be used to repay an EC loan to 30 per cent.
On the measure, Mr Mohamed Ismail, chief executive of PropNex Realty, said that it could cut the purchasing power of upgraders by 50 per cent in some situations.
Mr Nicholas Mak, executive director at SLP International, said the move is "an attempt by the Government to discourage buyers from overstretching themselves".
With the implementation of the new mortgage-servicing ratio capped at 30 per cent, a household earning $8,000 can afford an EC worth up to $850,000, assuming it borrows up to 80 per cent of the EC's cost, he said.
With the prices of recent EC launches ranging between $800,000 and $850,000, buyers with a household income lower than $8,000 might find themselves cash-strapped, he added.
The Ministry of National Development announced on Monday the 30 per cent cap, as well as a resale levy that will be placed on second-timer applicants who purchase EC units directly from developers.
Cancellation fees for ECs were also cut from 20 per cent to 5 per cent of the purchase price.
Mr Ismail said the measures will also prompt developers to adjust their land-bid prices to take into account a potential buyer's purchasing ability.
He noted that implementing the new loan-repayment cap for ECs will make these units almost unreachable. So, developers might build smaller units to maintain affordability for buyers and this may compromise a unit's living space, he added.
However, DWG executive director Andy Choa said property developers should not be overly worried about the new moves, apart from making minor adjustments to marketing costs and the duration of marketing efforts.
"EC developers have healthy margins, so they can take a bit of heat," he said.
On Monday, showflats for two EC developments - Sea Horizon in Pasir Ris and Forestville in Woodlands - operated until 11.59pm, giving some home buyers the option to purchase a unit before the new repayment cap kicked in yesterday.
wouldn't it be easier for those who aim for EC to go pte?
mayb price higher but can loan more & no resale levy?
another effect of this cm may be, first timers beg borrow steal also cheong to buy EC, bec they know BTO to EC is expensive liao, no point waste 8 yrs on BTO (3yrs construction + 5yrs mop)
Mickey Mouse (EC) is coming to town...... Smaller units with Higher psf for EC.
Good house
11-12-13, 18:30
Another option is to buy BIG size resale EM or EA...no resale levy.
Spend a bit of money on revovation and the interior will be as good as condo plus big space :)
Another option is to buy BIG size resale EM or EA...no resale levy.
Spend a bit of money on revovation and the interior will be as good as condo plus big space :)
Hi Good House, I agreed with u to use the levy to reno and have a bigger space and liking location.
This measure means EC price should come down, but when?
Till all the already tender out EC r soldout, by then the market will be over supply with new completed PC.
Agree with you the price won't come down so easily so long as deferred payment is allowed. 2nd timer can still purchase unit above 1.5 millions unit without a lot of cash but with DFS as long as their hdb sold b4 TOP.
Agree with you the price won't come down so easily so long as deferred payment is allowed. 2nd timer can still purchase unit above 1.5 millions unit without a lot of cash but with DFS as long as their hdb sold b4 TOP.
Building a lot of EC is another CM for resale HDB.. When those EC TOP, all the upgraders have not choice but to fire sales the HDB.. All the effect of CM and increase supply is slowly coming to the market... So now we can see when the music stops and who is still standing without a chair. I believe it is normally the common people... :beats-me-man:
Building a lot of EC is another CM for resale HDB.. When those EC TOP, all the upgraders have not choice but to fire sales the HDB.. All the effect of CM and increase supply is slowly coming to the market... So now we can see when the music stops and who is still standing without a chair. I believe it is normally the common people... :beats-me-man:
I believe the revised plan is to build the infrastructure first then boost the economy via availability of higher quality foreign labour.
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